Throughout the first quarter of 2020, the insurtech landscape has remained vibrant. There are record-setting venture capital investments, weekly announcements of new insurance/insurtech deals and lots of excitement.
Over the last few years, the volume of insurtech developments and offerings in claims has grown exponentially, and many are being implemented to help reduce adjustment cost and provide consumers with more choice, greater access and ease. Digital interactions, remote damage inspection and direct-to-debit payments are becoming widely adopted to move reach a touchless claim process.
However, given the tremendous progress over the last three years or more, some would suggest we should be moving much faster.
Insurers say it's simply too time-consuming to evaluate all the potential solutions. They also say that, while many of insurtech solutions are impressive, they only provide a single piece in a very large puzzle. Insurers also understand the significant work it takes to implement a solution: training, workflow and organizational changes just to get started. Insurers must be selective, which certainly elongates their decision-making cycles.
See also: Future of Claims: Automation, Empathy
Insurtechs, meanwhile, are at the mercy of insurers’ decision-making cycles, while also facing investor pressure to grow. They have to remain patient -- remember how the Ring doorbell was initially perceived? -- but waiting is not a strategy.
Time for a new approach: Pairing
It is time for more pairings, or combining of forces. If two or more insurtech solutions combine to solve multiple challenges together, it is easier for insurers to commit.
Examples of individual components include: sensors to detect losses, chatbots to aid loss intake, image capture to estimate damages, AI fraud tools and e-payments instead of mailed checks. These can be very helpful but still force insurers to splice everything together and to manage a portfolio of providers, often resorting to manual workarounds.
The pairing trend has already begun
A better approach is to have, say insurtechs integrate with claim system providers, a la Guidewire and Duck Creek. Original equipment manufacturers (OEMs) and insurers are teaming up on telematics -- look at the partnerships Ford announced with Allstate, Liberty Mutual and Nationwide. Hover and FileTrac announced a partnership to combine 3D photo visualization with a claim management platform.
See also: Claims: Beyond the ‘Moment of Truth’
Depending on where your insurtech stands today, a good first step is to self-evaluate and gather feedback from claims leaders, innovation teams and others. Consider which features are immediately adjacent and may add value if combined with yours.
There are endless potential pairing combinations to consider that could shape the next phase of the insurtech landscape. Insurtech alliances are not a one-size-fits-all answer but are very much worth exploring in this grow-or-die environment.
At the Connected Claims USA conference (June 24-25, Chicago), insurance leaders and insurtech partners will gather to learn and form lasting partnerships that will change the game.
